U.S. Hospital Volumes, Margins Steady during October

December 01, 2023

Amid rising expenses for supplies and drugs, U.S. hospitals continue efforts to improve their financial condition heading into 2024.

The latest Kaufman Hall National Hospital Flash Report highlights the latest trends in care through October. U.S. Hospitals had a 1.2 percent operating margin for the calendar year, but they still face consistent headwinds. A report last month indicated hospitals’ cash on hand declined 28 percent during the first half of the year.

Among the key takeaways from the latest Kaufman Hall report for October:

• Expenses:  Hospitals have seen year-to-date increases for supplies (6%), drugs (5%), and non-labor expenses (6%), accounting for a 4 percent increase overall.
• Volume: Hospitals’ year-to-date discharges (4%) and operating room minutes (4%) per calendar day both increased, while the average length of stay declined 5 percent.
  • A decline in observed patient days “likely reflects increased vigilance of these patients, including the deployment of case managers and use of observation units,” the report notes.
• Revenue:  Hospitals had a steady month during October, with both inpatient (2%) and outpatient (3%) revenue per calendar day increasing compared to September.
• Action steps:  The report notes the importance for hospitals to “think like consumer-facing organizations and better quantify the impact their relationship with consumers has on their business model.”
• Quotable:  “Key strategies include investing in technology, strengthening relationships with post-acute providers, expanding outpatient footprints, and deploying workforce optimization techniques,” said Erik Swanson, senior vice president of data and analytics, Kaufman Hall.

The National Hospital Flash Report draws on data from more than 1,300 hospitals from Syntellis Performance Solutions and is available online.